Figure 5-4 Suppose There Are Several Paper Mills Producing

question 4

Multiple Choice

Figure 5-4 Suppose there are several paper mills producing paper for a market. These mills, located upstream from a fishing village, discharge a large amount of wastewater into the river. The waste material affects the number of fish in the river and the use of the river for recreation and as a public water supply source. Figure 5-4 shows the paper market. Use this Figure to answer the following question(s) .
-Refer to Figure 5-4. Why is there a deadweight loss?

• A) because the marginal social cost of producing each additional unit in excess of Q₂ exceeds the marginal benefit
• B) because the marginal private cost of producing each additional unit in excess of Q₂ exceeds the marginal benefit
• C) because the marginal social benefit of producing each additional unit in excess of Q₂ exceeds the private cost
• D) because the marginal private benefit of producing each additional unit in excess of Q₂ exceeds the social cost

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Definitions:

Turnover

The rate at which employees leave a workforce and are replaced by new ones.

Multilevel Marketing

A marketing strategy where the sales force is compensated not only for sales they generate but also for the sales of the people they recruit, creating a downline of distributors and multiple levels of compensation.

Utilitarian Organization

A profit or nonprofit organization that pays its employees salaries or wages.

Division of Labor

The allocation of different tasks and responsibilities to individuals or groups in a society, organization, or among nations to improve efficiency.